Apple’s current practice of rejecting certain applications at the
final hurdle — submission to the App Store — is disastrous for
investor confidence. Developers are investing time and resources
in the App Store marketplace and, if developers aren’t confident,
they won’t invest in it. If developers — and serious developers at
that — don’t invest, what’s the point?

You have to wonder if Apple wants the App Store to be a museum of
poorly-designed nibware written by dilettante Mac OS X/iPhone OS
switcher-developers and hobbyist students. That’s what will happen
if companies who intend to invest serious resources in bringing an
original idea to the App Store are denied a reasonable level of
confidence in their expectation of profit.

Exactly right. If you only find out at the end of the development process that your app has been rejected — not for a technical problem that you can address but because Apple deems the entire concept to be out of bounds — then who is going to put serious time and talent into an iPhone app?

If there were other means of distributing iPhone apps — to put it in Paul Kafasis’s terms, if Apple’s were an App Store rather than the App Store — then it would be acceptable for Apple’s store to be exclusionary. But so long as it remains the sole means of distributing iPhone apps, then the policy for determining which apps get in must be inclusive, rather than exclusive, at least if there is to be a robust, innovative developer community for the iPhone like there exists for the Mac. An iPhone where you can’t compete against Apple’s own apps, or even where you can’t make fart jokes, isn’t much better than last year’s SDK-less iPhone but with games and to-do list apps.

Let’s be clear: forbidding “duplication of functionality” is forbidding competition. The point of competition is to do the same thing, but better. Worse, Apple hasn’t even said which functionality is off-limits. I’m not arguing about what’s legally or morally right in some abstract sense. I’m talking about common sense — talented developers are looking at what is going on with the App Store and choosing not to write iPhone apps, out of the fear that their efforts will be for naught. If good developers are afraid to write software for your platform, it is a problem.

The App Store concept has trade-offs. There are pros and cons to this model versus the wide-open nature of Mac OS X. There are reasonable arguments to be made on both sides. But blatantly anti-competitive exclusion of apps that compete with Apple’s own? There is no trade-off here. No one benefits from such a policy, not even Apple. If this is truly Apple’s policy, it’s a disaster for the platform. And if it’s not Apple’s policy, then Podcaster’s exclusion is proof that the approval process is completely broken.